Accra: The Venture Capital Trust Fund (VCTF) is advocating for a dedicated funding scheme to ensure sustainability and expand support for small businesses. Mr Percival Ofori Ampomah, General Manager, and Mr Michael Abbey, Chief Executive Officer (CEO), emphasized this need at a media roundtable discussing the Fund's 20th anniversary impact report, covering 2004 to 2024.
According to Ghana News Agency, the officials highlighted that a dedicated funding scheme would help bridge the US$15 billion financing gap for Small and Medium-sized Enterprises (SMEs), with the Fund having mobilized GH?2 billion so far. They noted that adequate financing would enable startups to thrive, boost innovation, create jobs, and drive economic growth.
Mr Abbey recalled the repeal of the National Reconstruction Levy, which hindered the Fund's ability to raise sufficient resources until 2022, when US$47 million was secured through World Bank assistance. Section 3 of the VCTF Act, 2004 (Act 680) mandates that 25 percent of proceeds from the National Reconstruction Levy fund the Trust. Though the provision remains in the Act, the levy was repealed 18 years ago. 'It is that law which has metamorphosed into the Growth and Stabilisation Levy today. Unfortunately, we were not given any share,' Mr Abbey said, noting the government's renewed commitment to establishing a National Venture Capital Fund.
He mentioned President John Mahama's assurance at the Kwahu Business Forum last month regarding its establishment and added that the Fund had begun discussions with the Ministry of Finance. 'It is more about providing a sustainable stream of funding for the operations of the Trust Fund, and we're hopeful it will kill the issue of having sustainable means of financial support,' he said.
Mr Ampomah stressed that enhancing support for startups and small businesses required policy changes in funding sources. 'If [the Act on Sources of Money for the Trust Fund] can be changed so that there's sustainable funding coming through, we can invest more, build more companies, and employ more people,' he said. Beyond SME financing, VCTF seeks to expand its impact on businesses, jobs, and economic growth, exploring new funding avenues and partnerships to provide financial and technical assistance.
'We will continue to engage with the Ministry of Finance to explore possible permanent funding sources to replace the National Reconstruction Levy,' Mr Ampomah said. 'We are also exploring amendments to the VCTF Act to allow for external funders to participate in the Fund, including an amendment of the governance structure to enable this.'
Mr Ampomah noted that early-stage and middle-level businesses needed patient capital, but high-interest rates and collateral demands from banks were unsustainable, adding that VCTF was addressing the challenge. He commended the media for its support over two decades, urging them to champion reforms to strengthen VCTF and increase its contribution to business and economic growth.